The gal operon of E. coli is negatively controlled by two regulatory proteins: Gal repressor and a newly discovered factor termed UIF (ultrainducibility factor). Both repressor and UIF act by binding to the same DNA sequences, QE and QI, providing an example of cellular regulation by different factors acting through common DNA elements. While repressor inhibits gal transcription under normal conditions, UIF down regulates gal only in cells devoid of Gal repressor. Both proteins are inactivated by Galactose. Inactivation of UIF, in the absence of repressor, causes extreme derepression which is termed ultrainduction. The mechanism of repression by Gal repressor has been studied in detail. Apparently, repressor does not act by sterically hindering RNA polymerase binding to promoter. Repression involves formation of a DNA-multiprotein complex of higher order structure, comprising DNA, one molecule of RNA polymerase, one molecule of cyclic AMP receptor protein and two molecules of repressor. In this complex, two repressor molecules, bound to two spatially separated sites, interact with each other looping out the intervening DNA segment to which the other proteins are bound. We have proposed that repression of transcription is achieved by a novel mechanism in which repressor freezes the bound RNA polymerase by a direct contact with the latter. The formation of DNA loop with a higher order structure facilitates such contact(s). We are currently investigating the various protein-protein contact sites and the state of transcription initiation (isomerization or promoter clearance) at which RNA polymerase is frozen.